Directors’ survey points to huge council social services overspend

English councils are spending £1.8bn above government recommendations on social care as a result of multiple service pressures and costs transferred from the NHS, town hall leaders have claimed.

The annual Association of Directors of Social Services and Local Government Association finance survey says councils increased spending on social care by more than 12 per cent in 2005-6 as a result of pressure on adults’ and children’s services.

But authorities face the prospect of severe cuts in 2006-7, with half having received a sub-inflationary 2 per cent overall grant increase.

The study of 121 authorities found that, in 2005-6, councils were anticipating spending almost £1.8bn above formula spending share (FSS) – the government’s estimate of social care demand, upon which it bases local authority grant levels. The gap was only £850m in 2004-5.

ADSS resources committee co-chair Anne Williams said funding pressures had built up as a result of demographic changes and NHS cuts in adult care, plus increased costs for looked-after children’s services.

She said councils had boosted spending through council tax rises, prioritising social care over other services and using reserves, but this was storing up cuts for the future, given the poor government settlement for 2006-7.

This is borne out by the fact that 80 per cent of councils plan to tighten eligibility criteria for services for disabled people, and 77 per cent for older people’s services.

Adult services have already been significantly rationed in 2005-6, the survey finds, with the proportion of users with low or moderate needs cut by 10 per cent.

Williams denied councils were being inefficient, saying social care had been the top service area for council efficiencies in 2005-6.

In adult care, the biggest pressure was on learning difficulties, where 78 per cent of authorities reported demand pressures and 76 per cent faced increased unit costs.

The survey also reveals that 46 per cent of authorities were on the receiving end of primary care trust cuts, averaging £167,000 each.

In children’s services, the biggest pressure was agency foster care, with 65 per cent of councils reporting increased demand and 54 per cent increased unit costs.

The survey also reveals councils are spending £22.4m – an average of £152,000 – on services to support people with learning difficulties and direct payment users.